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Red Hat CEO Says Software Vendor Model Is Broken

samzenpus posted more than 2 years ago | from the for-some-definition-of-broken dept.

Businesses 223

alphadogg writes "The current model of selling commercial enterprise software is broken, charged the CEO for Red Hat. It is too expensive, doesn't address user needs and, worst of all, it leaves chief information officers holding all the risk of implementing new systems. 'The business models between customer and vendors are fundamentally broken,' said Jim Whitehurst, speaking Wednesday at the Interop conference in New York. 'Vendors have to guess at what [customers] want, and there is a mismatch of what customers want and what they get. Creating feature wars is not what the customer is looking for.' Whitehurst estimated that the total global IT market, not including telecommunications, is about $1.4 trillion a year. Factor in the rough estimates that half of all IT projects fail or are significantly downgraded, and that only half of all features in software packages are actually used, then it would follow that 'easily $500 billion of that $1.4 trillion is fundamentally wasted every year,' he said."

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223 comments

Broken how? (2, Interesting)

odies (1869886) | more than 2 years ago | (#33966866)

How is it broken? There are different ways for companies to go by.

You can already buy commercial products that are made for general usage, like Microsoft Office. They can be feature rich products too, since they're used by many and different people and companies need different features. Since the products are made for large amount of customers, price for a single user or company is relatively low.

If you require something that the commercial products don't offer, you can either hire a development house to build it for you or do it in-house. That way you get exactly what you need, but the price is higher since it's made specially for you. If there is a mismatch between what you want and what commercial products offer, you go this route.

Now, the CEO of Red Hat basically says that model is broken, but offers no alternative. He says open source magically fixes it my offering services and support. But what is there to offer if the companies still need to go the second route if such product doesn't exist? And if it exists, what is broken with the commercial model? They do also offer support.

Re:Broken how? (4, Insightful)

DarkOx (621550) | more than 2 years ago | (#33967004)

But out side of ERP systems which almost always get customized, getting a commercial vendor to modify the product to suit your specific needs is nearly impossible, unless your are an F500. That is where Open Source can be a win.

Open source is great when you want some special behavior in the sales quoting tool that only a tiny fractions of others anywhere would want but you otherwise want the base set of features the mass market wants. If you select an open source tool you can make those modifications. If you select a product with a fairly mature code base its probably not even that costly in terms of developer time to keep your patch set applying cleaning against version latest.

 

WHAT vendors? (1)

MichaelKristopeit 63 (1920342) | more than 2 years ago | (#33966918)

every vendor i've worked with takes great effort in determining what the users want... usually spending much time in the office observing users in real world scenarios, and flat out asking them what would make their job easier.

perhaps the vendor the CEO was talking about was the one he knows best.

Re:WHAT vendors? (4, Insightful)

h4rr4r (612664) | more than 2 years ago | (#33966922)

So then you have never worked with Oracle, SAP, or Symantec, so which vendors are you talking about?

Re:WHAT vendors? (1)

MichaelKristopeit 63 (1920342) | more than 2 years ago | (#33966976)

all of the above + Sun + Intuit + Microsoft... all have spent time one on one with companies i've worked for AT THEIR OWN REQUEST.

Re:WHAT vendors? (5, Funny)

Anonymous Coward | more than 2 years ago | (#33967150)

I hope their sales engineers were wearing name badges. It would have been unnerving for them to have you stand next to them yelling "YOU ARE NOTHING!" in their ears.

Re:WHAT vendors? (0)

Anonymous Coward | more than 2 years ago | (#33967742)

Ahahahahahah

Re:WHAT vendors? (4, Informative)

MagikSlinger (259969) | more than 2 years ago | (#33967346)

Amusing. I work for a large utility up here in Canadia, supposedly one of the top 3 purchasers of Oracle & SAP in my province, and we've only seen the sales reps walking around, usually cracking down on not-enough-licenses issues.

Talk to them about an issue or feature you need, and it becomes a chorus of NO's followed by sales people trying to convince us Package X does all that (it doesn't) for a low, low price of Y (it isn't low, and it's always more than Y when the bill comes).

Re:WHAT vendors? (1)

MichaelKristopeit 68 (1920332) | more than 2 years ago | (#33967576)

i'm not talking about sales reps... i'm talking about groups of engineers who simply observe real world use, and attempt to make it easier. they aren't there to give you what you want, they are there to determine what you want or what would make completing the tasks the software is used for more easily.

Re:WHAT vendors? (2, Interesting)

MagikSlinger (259969) | more than 2 years ago | (#33967622)

Never seen them (vendor engineers). Seriously. Where did you work where they would talk to you?

There are medium to smallish companies we buy software from, and they have sent their engineers to observe & talk to us. But none of the big boys have ever sent any engineer to us.

Re:WHAT vendors? (1)

MichaelKristopeit 40 (1917548) | more than 2 years ago | (#33967734)

i've seen them at 3 different bay area companies i worked for.

perhaps it was the close proximity to the engineers why they chose use... perhaps they overlooked your company when the sales reps reported that you distrust them.

Re:WHAT vendors? (1)

MichaelKristopeit999 (1925654) | more than 2 years ago | (#33967634)

I am of course totally making this up. I clearly have nothing better to do with my life.

Re:WHAT vendors? (1)

MichaelKristopeit 55 (1920218) | more than 2 years ago | (#33967688)

MichaelKristopeit999 is an impostor attempting to steal my identity.

to the individual responsible:

present yourself to me; admit what you've done, then i will kill you.

Re:WHAT vendors? (1)

MichaelKristopeit999 (1925654) | more than 2 years ago | (#33967744)

MichaelKristopeit 55 is an impostor attempting to steal my identity. to the individual responsible: I am a loony and I like to make threats that will soon get the cops called on me.

Re:WHAT vendors? (1)

MichaelKristopeit 38 (1917446) | more than 2 years ago | (#33967852)

"MichaelKristopeit999" is attempting to defame and discredit me to the end of stealing my identity.

to the pathetic, cowardly individual responsible:

present yourself to me; admit what you've done, then i will kill you.

Re:WHAT vendors? (0)

Anonymous Coward | more than 2 years ago | (#33967384)

Real people in that position don't need to shove that in people's face. I'll stop here before I harm your little ego too much.

Re:WHAT vendors? (1)

MichaelKristopeit 66 (1920336) | more than 2 years ago | (#33967466)

what does an anonymous coward know about real people?

i didn't shove my opinions on the world like the red hat CEO did... i simply pointed out the flaws and missing data in his opinions.

why do you cower? what are you afraid of?

Re:WHAT vendors? (0, Flamebait)

h4rr4r (612664) | more than 2 years ago | (#33967524)

Why do you lie?
What are you compensating for?

Re:WHAT vendors? (1)

MichaelKristopeit 41 (1917550) | more than 2 years ago | (#33967632)

i don't lie. i don't compensate. I BRING NOTHING BUT THE TRUTH.

my name is michael kristopeit. i live at 4513 brittany ct. eau claire, wi 54701.

what is your full given name? what is an address where you can be reached? why do you cower?

Re:WHAT vendors? (0, Troll)

h4rr4r (612664) | more than 2 years ago | (#33967564)

Why do you need so many sock puppets?

Re:WHAT vendors? (1)

MichaelKristopeit 11 (1916010) | more than 2 years ago | (#33967664)

why do you think i need anything? did i say i needed anything? why do you put words in the mouths of others?

i am one person, moron.

if you can dismiss ANY account as a "puppet", then you must dismiss ALL accounts as "puppets" as there is nothing differentiating them.

did your mother name you h4rr4r875r8r5r5r6rrr65r7rr?

why do you cower?

Re:WHAT vendors? (3, Interesting)

AVee (557523) | more than 2 years ago | (#33967714)

I actually worked at a software company in that league (a Top 10 software vendor). Those companies are big, weird and certainly not to be regarded as a single entity. Whether or not they are going to spend time on your needs really depends on loads of factors, the biggest ones being politics between the big shots in both companies and the amount of money you bring in. If your CTO is very good at the politics you may get above average attention. If the amounts you get invoiced are big enough to be noticed in the quarterly results you will get above average attention.

But if your just 'Joe Sixpacks Beer Store' you are generally screwed. But in that case you probably also wouldn't want to pay for the costs of proper attention, if you would be willing to pay for all the hours spend to accomodate your needs you would be served (and go bankrupt). Building software isn't cheap, an you are going to pay the full price for anything that is build just for you one way or another.

And the of course there are the governmental projects, but those are in a league of their own. Those are the projects where you send the people you wouldn't dare sending to any of your bigger customers. Government officials spending tax dollars will always pay, regardless of how badly things get screwed up. (The amount you get to spend seems to be a dick size issue, and it's all just tax money anyway...).

Re:WHAT vendors? (3, Insightful)

Archangel Michael (180766) | more than 2 years ago | (#33967034)

Real world example, and why I don't do software development:

A customer was using a text field in a database for a "date". They wanted to have that field usable to send out notices (dog tag renewals) on a date. I was wondering why the database field wasn't set to the "Date" type proceeded to convert the field to that type. Proceeded to setup a query and template to generate the notices automatically, rather than manually doing it as had been.

I then proceeded to show the primary user that made the request the changes, how to enter the dates and thought I had done a awesome job making the software better (it was better). The user used the system for a week or so, but couldn't for the life of her figure out why it wasn't working.

So I make a house call out to the facility and watch her as she enters a new date 10/20 into the database. Well the software beeps and tells her the date is invalid (duh), and she complains that she has to type in the year.

Customers are fickle, ask for things they want, but aren't willing to implement. I had to unwind the changes even though they made the database much more functional and saved time, all because the primary user didn't want to type two extra characters, it was easier compiling the notices by hand.

No, I'm not kidding.

Re:WHAT vendors? (2, Insightful)

MichaelKristopeit 64 (1920340) | more than 2 years ago | (#33967146)

why didn't you add some input cleansing that could have automatically defaulted the year and given the user exactly what they wanted?

Re:WHAT vendors? (1)

mmaniaci (1200061) | more than 2 years ago | (#33967206)

Until she starts putting "Yesterday" in the box...

Re:WHAT vendors? (3, Insightful)

MichaelKristopeit 64 (1920340) | more than 2 years ago | (#33967268)

because string comparison and integer math to determine yesterday's date are too difficult for you?

why else have a text field? let them type in "2 weeks ago" and make it work... IT'S TRIVIAL.

i'd make the interface with a calendar popup and navigation buttons to jump days and weeks and months and years.

Re:WHAT vendors? (1)

Surt (22457) | more than 2 years ago | (#33967232)

Exactly what I wondered. The gp post seems like a great candidate for the daily.

Re:WHAT vendors? (1, Insightful)

MichaelKristopeit 64 (1920340) | more than 2 years ago | (#33967340)

there is an alliance of individuals that moderate anyone that attempts to contradict me as insightful... it couldn't be more painfully obvious here.

the vendor represented by "Archangel Michael" created more work for the user, then when the user asked for a trivial feature to return the workload back to what it was before, the vendor gave up and trashed all their work, and the "slashdot community" deems that act AS THE HIGHEST LEVEL OF INSIGHTFULNESS.

you're all idiots.

slashdot = stagnated.

Re:WHAT vendors? (0)

Anonymous Coward | more than 2 years ago | (#33967324)

Mod parent up. Grandparent is an idiot for not doing this, and an even bigger idiot for not noticing all the improperly formatted dates in the database and doing this before showing the client.

Re:WHAT vendors? (5, Insightful)

PhunkySchtuff (208108) | more than 2 years ago | (#33967204)

This is a prime example of not listening to what the users want.

It is trival for the software to figure out what the current year is. With a small amount of effort done once on the part of the programmer to convert a day/month (or month/day) date into a full date, the user would have been happy, the software would have worked as they wanted it to and it would have been quicker and less error-prone for them to enter the data.

Instead the software vendor implemented what they thought the user wanted and more importantly didn't listen to the user completely, they implemented half of what the end user wanted and this resulted in more work having to undo the work that had been done to revert the system back to the "old 'n busted" way it was before.

Customers ask for things they want, but the developer needs to be willing to listen to them,

I had a similar thing happen recently, however this was for a database I was developing for my own purposes.

It has a field type of time, but it's really strict - you must enter a time as hh:mm[:ss] AM|PM anything else beeps at you as being invalid (duh)

With some coding effort and a liberal amount of google searching, I was able to have this field exhibit a lot more intelligence and be infinitely more user-friendly. I now have it so that you can enter just about anything that can be interpreted as a time and it'll sort it out. I get the computer, not the user, to do the hard work.

Now, I can enter 800 and it will be 08:00 am (I have a range of hours defined that are AM or PM - 700 is 7pm for instance - this is completely arbitrary and works perfectly for the intended use)

I can enter 1525 and it will enter 3:25 PM, I can enter 4 and it will enter 4PM, I can enter 9 and it will enter 9am. I can enter 12:34 and it will also take it...

It's now a lot quicker for me to quickly enter a few numbers rather than enter numbers separated by colons and an explicit am or pm. It's also a lot less error prone as there's less thought involved, less keystrokes and no need to use a shift+key stroke combination.

In your example, a few more minutes of coding effort to detect a supposedly invalid date (I know what 10/20 is, the user knows what 10/20 is, you know what it is, so tell the computer what it is) and everyone would have been happy.

Re:WHAT vendors? (3, Interesting)

Archangel Michael (180766) | more than 2 years ago | (#33967302)

that all works until someone needs 4 to mean AM sometimes and PM all the other time.

Defaulting the current year makes sense, until you have cards for December being entered in January (11 months difference), a common yearly adventure.

Did you miss the part that she would rather manually sort through the records than type two characters?

Re:WHAT vendors? (3, Insightful)

frosty_tsm (933163) | more than 2 years ago | (#33967418)

that all works until someone needs 4 to mean AM sometimes and PM all the other time.

Defaulting the current year makes sense, until you have cards for December being entered in January (11 months difference), a common yearly adventure.

Did you miss the part that she would rather manually sort through the records than type two characters?

Your heart was in the right place, but failed when you fixed a pain the customer didn't mind by creating one they did.

Re:WHAT vendors? (1)

Archangel Michael (180766) | more than 2 years ago | (#33967616)

The customer wanted to be able to sort by dates, I did that. The pain of doing things differently wasn't about anything other than not wanting to change when change is what was requested.

I would rather type to extra numbers than have to manually sort though records because data in a field wasn't indexable (DBaseIII) the way the customer wanted. But that is me, I can see the benefit of not doing things the hard way, and changing how I do things to get things done better, more efficiently.

Of course it is easy to solve that problem today, we have better tools for dealing with it. But the TYPE of problem still exists. Customers saying they want something, and realizing what they asked for isn't really what they want.

Re:WHAT vendors? (1)

PhunkySchtuff (208108) | more than 2 years ago | (#33967434)

The user initially loved the idea of the proper date field - a small tweak to it and they would have been completely happy.

Defaulting to the year makes sense, as long as you have a well defined rule for it that the user can understand - if you commonly enter records for Jan of the following year in December, make it so that a month of 01 when entered late in the year is for the following year - similar to how most vendors worked around the y2k bug by having a rule that anything after (for example) 40 was 19nn and anything before 40 was 20nn

Interact with the end user, refine your model of what they want and you will end up producing a better product and have happier end users.

Re:WHAT vendors? (3, Insightful)

cyphercell (843398) | more than 2 years ago | (#33967526)

Re:WHAT vendors? (1)

PhunkySchtuff (208108) | more than 2 years ago | (#33967624)

So, you'd rather an end user when forced by a database program that will only accept explicitly formed times to enter hh:mm AM or hh:mm PM (and not any close variant of this, such as hh:mm am) rather than entering something a lot quicker and less prone to error, such as 7p or 1245.

In the first case, entering 7:00 PM this takes 9 keystrokes, including the Shift key. Reduce that to 2.

In the second case, entering 12:45 PM this also takes 9 keystrokes and is reduced to 4.

If you're doing this hundreds of times a day, the extra time very quickly adds up, plus you need to think a lot harder about ensuring you enter exactly what the database wants as a timestamp, remembering capitalisation etc ...

Re:WHAT vendors? (4, Insightful)

timeOday (582209) | more than 2 years ago | (#33967338)

No, simply listening to what users want will almost never work - because they don't know. Almost always, they have some vague idea, but that's it.

Re:WHAT vendors? (1)

PhunkySchtuff (208108) | more than 2 years ago | (#33967378)

So in that case it's a process of refinement - implement what they say they want and seek feedback on the implementation rather than implementing what they say they want (even though their spec was incomplete) and saying "There, that's it. Take it or leave it"

Re:WHAT vendors? (2, Insightful)

h4rr4r (612664) | more than 2 years ago | (#33967430)

In what dream world will they keep paying for all these one off solutions?

Users want cheap, good and fast. Providing all three is impossible.

Re:WHAT vendors? (1)

timeOday (582209) | more than 2 years ago | (#33967740)

Exactly - realistically, any complex project is a process of refinement. But when people fail to recognize that and instead budget for a "hole in 1," they are setting expectations almost guaranteed to result in the project being considered a "failure," which is the normal thing to do.

People say, "why are software projects still so expensive and time-consuming" - I say, compared to what? Some imaginary utopia where software projects are much easier than they actually are?

Re:WHAT vendors? (1)

cyphercell (843398) | more than 2 years ago | (#33967364)

I love how retarded your description is.

800 = 8:00am
700 = 7:00pm

????

Seriously, stfu.

Re:WHAT vendors? (5, Informative)

PhunkySchtuff (208108) | more than 2 years ago | (#33967536)

Did you miss the part where I said:

(I have a range of hours defined that are AM or PM - 700 is 7pm for instance - this is completely arbitrary and works perfectly for the intended use)

If I'm booking an onsite technician for instance, they are not going to be onsite at 7am, I'm not sending anyone out that early in the morning, yet it's completely possible they'll be doing work after hours starting at 6 or 7.
In the same light, I'm not sending anyone out to start work at 8pm, but would quite happily have someone going out at 8am.

In this case, what is "retarded" about having a rule that determines that 8 .. 11 is AM and 12, 1 ... 7 is PM?

In the extremely rare situation that this rule doesn't apply, enter the time as "7" for instance and it gets corrected to 07:00 AM, change the A to a P and you're done. Either that, or enter the time as "7p" and it's put in as 7:00 PM

Or would you rather have to enter every single time value as hh:mm:ss AM|PM explicitly?

Re:WHAT vendors? (1)

maxwell demon (590494) | more than 2 years ago | (#33967220)

And it wasn't possible to extend the software to accept dates in the short format, and transform it to the longer format before sending it to the data base?

Re:WHAT vendors? (1)

Archangel Michael (180766) | more than 2 years ago | (#33967474)

You and the other people are missing the point.

I could have really customized the code and done a whole bunch of sanity checks on the user input, all to save two digits being entered. All of which would increase complexity and other types of problems. Defaulting to current year in programming logic is great, until it isn't. Then you're in a race to fix the exceptions, which adds to bloat and slowness.

And it is no wonder that there is so much database fubar out there with people coding defaults, having to fill in exceptions rather than making things explicit in the first place.

I could have had pull down menus, and/or clickable graphical calendars too. And people wonder why software is bloated with features only a few people want. Which is exactly what the article itself is saying.

Lastly, this was from DbaseIII days, not modern SQL and Web based forms generated and sanitized by Perl Scripts, which would make such a feature quick and dirty point click easy (for the user).

Re:WHAT vendors? (1)

cyphercell (843398) | more than 2 years ago | (#33967600)

don't forget to verify that the system is using the proper fucking time in the first place.

I got what you were saying, dipshit (key user - I love that this implies that OTHER fucking people may have benefited from the work destroyed) didn't want to enter two characters, so scrapped what was probably a 300% increase in efficiency.

Re:WHAT vendors? (1)

frank_adrian314159 (469671) | more than 2 years ago | (#33967222)

Customers are fickle, ask for things they want, but aren't willing to implement. I had to unwind the changes even though they made the database much more functional and saved time, all because the primary user didn't want to type two extra characters, it was easier compiling the notices by hand.

So why couldn't you put a hack in the UI that checked if the date was in MM/DD format and default to the current year (or next, if you were storing the expiration)? Some odd notion of "the UI data format must exactly match the data format" purity? It seems like a fairly reasonable user request. And, it would have been three extra characters, as they'd had to have entered the separator character, as well. Force yourself to type three extra spaces at the end of each line of code for a year and tell me how much you like it. It seems like you had a "stupid user meme" in your head that you were unwilling to get rid of. It doesn't speak well of either your development or personal interaction skills.

Re:WHAT vendors? (1)

icebraining (1313345) | more than 2 years ago | (#33967256)

The user is right: why should she spend extra effort? Don't we have computers to make those efforts for us?

More specifically: couldn't you have included a filter that would recognize a MM/DD date and turn it into a correct one before inserting it in the database? Plenty of DB engines nowadays support REGEX in triggers.

I think you're blaming the wrong person.

Re:WHAT vendors? (1)

Archangel Michael (180766) | more than 2 years ago | (#33967520)

You're missing the point. (besides making assumptions that is is a current problem)

This was back in DbaseIII days (DOS,40x25 screens, monochrome CRTs). The problem is customers wanting something, but not willing to do what it might take to get there. OFTEN times choosing the harder way (manually sorting records) rather than doing things "differently".

Re:WHAT vendors? (1)

CasperIV (1013029) | more than 2 years ago | (#33967444)

That's a UI failure. If the user wants to enter month/day, let them enter it and logic it in behind the scenes. I have users ask for things like this all the time... so I give it to them. It's not something that's going to be a big deal, and it makes their lives easier entering it. Either that or mask it properly with a defaulted year.

Re:WHAT vendors? (1)

somersault (912633) | more than 2 years ago | (#33967464)

Almost nobody who is paid to develop software is thinking "you're kidding". They're thinking "why not just append the year before submitting to the database?". It really wasn't the customer who was being silly and inflexible here.

Re:WHAT vendors? (0)

Anonymous Coward | more than 2 years ago | (#33967660)

You made the mistake of assuming it was a date. It was really a month and day to represent the anniversary (every year) of when the renewal goes out. Two integers and some validation.

Re:WHAT vendors? (1)

phek (791955) | more than 2 years ago | (#33967188)

i think his point is that the vendors sell what makes work easier for Company A, B, and C to Company D even though only the features that make work for Company B are helpful to Company D. So now Company D has to buy all those other features which they'll never use and Company A and C will have to buy the features that help all the other companies when they have to renew their license.

Using the CEO's airline model, they were able to get say the catering industry to reduce costs by not providing something like resealable plastic containers and instead opting to use a cheaper single use container. In the software industry with the model the way it is, we can't make changes on a per client basis.

Re:WHAT vendors? (1)

Surt (22457) | more than 2 years ago | (#33967296)

Yeah, the place I work at spends a lot of time and money understanding what our customers need, and we have a focus on software customization to boot so if it isn't exactly what they need (and each customer has slightly differing needs) they can get to what they want with relative ease.

Of course, we've also had over 50 implementations of large scale enterprise software and 0 failures, so we don't have our fair cut of the 500 billion worth of failure money.

Actively used features (0)

Anonymous Coward | more than 2 years ago | (#33966924)

The summary suggests that money could be saved by not developing the half of all features which are will not used. How can you tell which features will be used before you develop them?

Re:Actively used features (4, Funny)

snowraver1 (1052510) | more than 2 years ago | (#33966990)

Easy, just make a menu item for them and then every time it's clicked, send usage data. That way you can have the worst of both worlds: A convoluted menu system and lack of functionality.

Re:Actively used features (1)

leuk_he (194174) | more than 2 years ago | (#33967026)

It is not that hard The other model is to develop the application yourself instead of buying it. but the implication is that you become a software develop instead of doing the business you are actually good at. If your software does something better than the competitor then you might be a good developer.

Blah, blah, blah... (1, Funny)

Anonymous Coward | more than 2 years ago | (#33966934)

...buy some Red Hat products.

Fragmented market? (0, Troll)

Subm (79417) | more than 2 years ago | (#33966994)

Re:Fragmented market? (0)

h4rr4r (612664) | more than 2 years ago | (#33967478)

He solved nothing, he just stole the idea of repositories. Stealing good ideas is good, claiming them as your own is shifty.

Cloud will kill the model (4, Interesting)

Mephistophocles (930357) | more than 2 years ago | (#33967002)

Whitehurst touches on the emergence of cloud computing in the enterprise as well, and this is integral to an intelligent discussion of the imminent death of the traditional licensing system of enterprise software. From TFA:

""People say [they are interested in the] cloud but what they are really espousing are frustrations with existing IT business models," Whitehurst said in an interview with IDG News Service after the presentation. Whitehurst kicked off his talk by asking a seemingly simple question: "Why are costs of IT going up when the underlying costs to deliver those services halves every 18 months?" The cost of computing should come down, he reasoned, thanks to improving processing speeds and storage capacities. New, more powerful development tools and frameworks should also ease the cost of deployment. Yet IT expenditures continue to go up by about 3 percent to 5 percent a year.

That ease in the cost of deployment, coupled with the flexible infrastructure the cloud supplies, will eventually mean the death of the traditional "per-proc" style of enterprise licensing. Happily, it likely means fantastic opportunities for open-source to take back a large share of the market. I've spent the last year migrating my medium-sized enterprise to the cloud AND a near-100% opensource infrastructure. In my particular sector (healthcare) that's becoming a trend - it's not a coincidence that the move within the medium to medium-large enterprise to the cloud often goes hand-in-hand with a serious investigation of open-source software within the mission-critical, production infrastructure.

Re:Cloud will kill the model (0)

Anonymous Coward | more than 2 years ago | (#33967100)

I am intrigued by your experience and would like to subscribe to your newsletter...

But seriously, if you have a chance can you reply with a list of what specific cloud resources and opensource infrastructure you've selected and migrated upon? Thanks from a new healthcare CIO playing catchup.

Maybe. (2, Insightful)

khasim (1285) | more than 2 years ago | (#33967122)

But from his original statement:

The cost of computing should come down, he reasoned, thanks to improving processing speeds and storage capacities. New, more powerful development tools and frameworks should also ease the cost of deployment. Yet IT expenditures continue to go up by about 3 percent to 5 percent a year.

That's because as it because possible to do more in X hours ... more is demanded by management.

As more space becomes available, more data is stored. Older data is not discarded.

Re:Maybe. (0)

Anonymous Coward | more than 2 years ago | (#33967602)

It's worse than that. Today's data formats are much less efficient than the past ones. Compare MS Excel files to TAB-delimited spreadsheets. How does HTTP data transfer compare to FTP?

XML is the worst in this respect. XML data is stored in character format even when all the data is numeric. A binary file can use much less space on disk.

Re:Cloud will kill the model (1)

maxwell demon (590494) | more than 2 years ago | (#33967262)

That ease in the cost of deployment, coupled with the flexible infrastructure the cloud supplies, will eventually mean the death of the traditional "per-proc" style of enterprise licensing.

They will likely be replaced with a "per transaction" style of licensing. I'm not sure this is an improvement.

Re:Cloud will kill the model (0)

Anonymous Coward | more than 2 years ago | (#33967366)

Actually, Cloud Computing will enforce the model. Cloud computers and storage media exist somewhere on the internet, owned by someone else. Rather than buy software and a site license, you now have a Cloud landlord. There are Cloud System Administrators, electricians, and others working for said landlord. Before, you just didn't own the software; you now don't own the computers & data as well.

Do you like having a landlord & paying rent on your house? Why would you want one affecting your business.

Re:Cloud will kill the model (2, Interesting)

Surt (22457) | more than 2 years ago | (#33967412)

This seems like a pretty fundamental misunderstanding of enterprise licensing costs. Costs are calculated per cpu or per seat because that's a convenient proxy for the size of the system, not because of any actual deployment expenses associated with the number of cpus or seats. If you think your licensing price is going to magically head downward because of cloud computing, you are in for a nasty shock. Instead prices will head up because the cloud providers now have more lock-in. In any case, the licensing cost goes to development and profit. Which of development and profit do you think the enterprise software provider wants to give up when they move to a cloud model?

Waste is what drives the economy (4, Insightful)

m94mni (541438) | more than 2 years ago | (#33967022)

Just like war, commuting and other essentially completely worthless phenomena, waste of programmer time makes money exchange hands, and therefore increases GNP.

In this case: who would want to be the first to go out on a limb publically and say "I want to decrease the IT sector by 50%"?

Don't blame me, I didn't design that stupid measure.

Re:Waste is what drives the economy (1)

MichaelKristopeit 64 (1920340) | more than 2 years ago | (#33967072)

uh... exchanging money does not necessarily increase GNP.

Re:Waste is what drives the economy (2, Insightful)

seifried (12921) | more than 2 years ago | (#33967140)

uh... exchanging money does not necessarily increase GNP.

Actually it does:

A variety of measures of national income and output are used in economics to estimate total economic activity in a country or region, including gross domestic product (GDP), gross national product (GNP), and net national income (NNI).

http://en.wikipedia.org/wiki/Measures_of_national_income_and_output [wikipedia.org]

Re:Waste is what drives the economy (0, Flamebait)

MichaelKristopeit 64 (1920340) | more than 2 years ago | (#33967230)

you're an idiot. ESTIMATING GNP, and actually CREATING PRODUCT are painfully obvious completely different things.

exchanging money does not necessarily increase GNP. if me and you spent 20 years passing the same dollar back and forth, would any new product exist?

Re:Waste is what drives the economy (2, Insightful)

jfengel (409917) | more than 2 years ago | (#33967326)

Actually, you're the idiot here. GNP is a technical term, and you were pointed to the definition of it. It's a mechanism for estimating production and productivity.

It's not a perfect measure, for a number of reasons, including the one you pointed out. But that's the fault of the measure, and you were the one who brought it up.

If you mean productivity, say "productivity". Use the wrong technical term and people will generally ignore it, but when you call them an idiot for validly correcting you, it means you're the idiot in the conversation.

Re:Waste is what drives the economy (1)

MichaelKristopeit 66 (1920336) | more than 2 years ago | (#33967556)

who means productivity? GNP = GROSS NATIONAL PRODUCT.... it measures the total dollar value of all final goods and services produced...

m94mni claimed "money exchanges hands, and therefore increases GNP"... it CAN, if that money is put to use by the new holder of it to produce new goods or services, but the act of exchanging it does not NECESSARY increase GNP as the word "THEREFORE" implied.

if you're mean you're an idiot, YOU'RE RIGHT.

Re:Waste is what drives the economy (0)

Anonymous Coward | more than 2 years ago | (#33967354)

You've created a service economy. Maybe call it Western Union?

Re:Waste is what drives the economy (1)

m94mni (541438) | more than 2 years ago | (#33967304)

Correct, but all my examples do.

Re:Waste is what drives the economy (0, Flamebait)

MichaelKristopeit 66 (1920336) | more than 2 years ago | (#33967382)

examples? you made A STATEMENT OF IMPLICATION. that statement was false... i pointed that out, and you agreed with me.

THEREFORE, you're an idiot.

Re:Waste is what drives the economy (0)

Anonymous Coward | more than 2 years ago | (#33967156)

I don't want to decrease the IT sector by 50%. I want to see all 100% put to good use instead of wasted.

Re:Waste is what drives the economy (1)

m94mni (541438) | more than 2 years ago | (#33967318)

Me too, but sadly "good use" is not a factor in GDP calculations.

F#ck yeah! (1)

guybrush3pwood (1579937) | more than 2 years ago | (#33967052)

F#ck yeah, and I want my share!

Re:F#ck yeah! (1)

c0lo (1497653) | more than 2 years ago | (#33967292)

Share of what? I think there are plenty of chances that you already have your share in the wasted effort and, if you are employed, a small share of the wasted money (it is called wages).

In other words, don't equate the effort to the results: you can still work very hard (in terms of effort intensity) to produce waste (in terms of achieved results) - chances are, though, you'll have a better share (in absolute terms, even if not as a percentage) if your efforts result in something that's useful.

Re:F#ck yeah! (1)

guybrush3pwood (1579937) | more than 2 years ago | (#33967672)

My attempt at being funny has been unsuccessful, evidently.... ;) I *do* take a share, by the way, so all's good. Keep the wast going.

Re:F#ck yeah! (0)

Anonymous Coward | more than 2 years ago | (#33967788)

Keep the wast going.

And at least have fun

Yeah, and then some (1)

swordgeek (112599) | more than 2 years ago | (#33967130)

So we had a major upgrade project. Our old authentication software on old hardware was going to be replaced with new software, new hardware, and a new architecture made possible by the features in the new software.

Months of planning, rearchitecting, tripping over bugs ("oh, it's fixed in the next major version"), and testing, and it turns out that the software from vendor A does not work acceptably on the hardware from...vendor A.

Throw the plan out, and start from scratch on new hardware. Halfway through, vendor A (who by this time has been bought by Vendor B) changes their licensing/maintenance model, such that it will cost us an extra million and a quarter dollars (!!!) PER YEAR (!!!!!) to use their crappy software. Add an extra $50k to license their OS if we don't buy hardware from them.

(Yes, you can probably guess who A and B are :-)

Lucky for us, a new vendor rose from the ashes of an exploding corporate division, and is writing competent code. They also seem to be capable of supporting their own product. Not everyone is as "lucky" as us though, to make something work the third time.

To be fair, the $1.4 trillion in software costs will have little or nothing to do with the 40% of failed projects. Nobody of a reasonable size pays for software until it goes into production.

Too much common sense... head... 'sploding.. (1)

eepok (545733) | more than 2 years ago | (#33967136)

The business models between customer and vendors are fundamentally broken,' said Jim Whitehurst, speaking Wednesday at the Interop conference in New York. 'Vendors have to guess at what [customers] want, and there is a mismatch of what customers want and what they get. Creating feature wars is not what the customer is looking for.'

Yes! There are so many features that end up being hindrances or that fall short of actual needs that it makes an investment not worth while. For example, here's what I want out of just my cell phone:

My Cell Phone (Rumor2) needs to:
Make and receive phone calls (Grade: A)
Keep a phone book (Grade: A)
Send text messages using a mini keyboard (Grade: A)
Play MP3s (Grade: D-)
--3.5mm headphone jack (Grade: F)
--Drag/Drop micro usb computer interface (Grade: C)
--Easy playlist, enqueue functions (Grade: F)
Serve as an impromptu, good-enough camera as needed and transfer photos to another cell and to a computer (Grade: B)
Take a micro-SD 8GB card (Grade: A)
Have the option for a low-graphic, low-power GUI. (Grade: C)
Be included with the $40/month 2-year contract that allows for limited cell-to-cell photo transfer, unlimited nights/weekends, unlimited texting.

That's what I need... this is what else my phone tries to do:
Connect me to a Sprint-only pseudo-internet as well as the real internet
Sell me games for my phone
Sell me ringtones (while not allowing me to make my own)
Be GPS

And I know I'm not alone. It's not like I want a rotary phone attached to my hip, but I don't want to be SO WIRED all the time. Give me a tablet PC that runs as Ubuntu Netbook Remix (or some other low-graphic moddable UI) for $400, the phone that fulfills only the needs I list above, and a desktop PC and I'm set. That's it. Game over.

Re:Too much common sense... head... 'sploding.. (1)

js3 (319268) | more than 2 years ago | (#33967476)

it's nice to list what you want, but others want something else too. That's just the way the world works. It's just QQ to me

$X wasted == doesn't understand the copyright (0)

Anonymous Coward | more than 2 years ago | (#33967186)

Duh, if software's priced as an exclusive, transferable asset where one person's possessing a copy excludes another from getting one, then of course it's broken. The price of software would ideally be adjusted to do three things:

  * security

  * drive the developers to add capabilities and fix bugs where it's needed

  * extract money from customers in a way that maximizes value

Support contracts seem like they would do a better job of all three than outright sales, so I'd expect RedHat to understand this, but saying that "$X is wasted" makes it sound like he's still thinking of software like an exclusive asset. With these three goals, money cannot be wasted. Rather, software can be less secure than it should, developer time can be wasted, and customers can get a bad value because the vendor's revenue isn't extracted from them optimally. None of these three things is close enough to "waste" to even make a good analogy.

What He Is Missing (1)

0xG (712423) | more than 2 years ago | (#33967192)

...is that we don't want to "rent" the software.
(which is how Red Hat makes its money: on maintenance)

The endless cycle of maintenance upgrades for the sake of compatibility with other software that has been upgraded for the sake of compatibility with...
That is what needs to be fixed for enterprise customers, but it goes directly against the business interests of the software vendors. We'll never see that fixed...

Red Hat is Wrong (1)

daviskw (32827) | more than 2 years ago | (#33967224)

If all Software and IT needs were being funneled into new projects and new features and new ideas then the Red Hat guy might be write. This is not the case however. Most Software development done in the world is based on specific needs generated by specific customers on existing IT systems. It is a painfully slow, deliberate process that sometimes produces astonishingly public failures. Most of the time what is produced is quite successes that for the most part do what the customer wanted done.

A couple of years ago my organization switched from Silicon Graphics workstations running an ancient C++ compiler to Red Hat Linux on Dell workstations. It took us about six months to migrate the code from one platform to another. We didn't develop new features that nobody wanted. We didn't create waste where none existed. What we did is exactly what the customer paid us to do.

Vendor driven software that is created with an unknown user in mind is usually pretty scary in that you are always going to get features you didn't want and features that you do want but they don't work well. Guess what, that's what you get for making a product that is designed for the general propulation. Cars are the same way. I want a Toyota Truck, and I want a really cool sound system. They don't sell them that way. I get the adequate sound system that Toyota provides, it kind of does what I want, but if I want better I am going to have to by better, and even then it make not work 100% in my truck, and it will most certainly do things I didn't want it to do.

This isn't, for the most part, waste. Waste is what you get when you contract a software system to build, it takes five years, costs 100 million, thirty developers, and then when you are two weeks from shipping sales tells you that they can't sell your stuff. However, for every one of those types of projects there are literally dozens that didn't get cancelled and were shipped to sometimes eager customers.

Customers are stupid... (0)

Anonymous Coward | more than 2 years ago | (#33967316)

... I'm sorry to say it but listening to what customers want more often then not is a recipe for disaster, what I think needs to happen are specialists who specialize in trying to assess people things need but don't know they yet want. The whole idea that people are good at self-analysis of what they need/want for their organization is the issue, some times you get customers who are but more often then not your customers are clueless.

"only half of all features are used" = by design (1)

xxxJonBoyxxx (565205) | more than 2 years ago | (#33967428)

[evil]As a guy who puts together some of the software packages you buy I can tell you that bundling of commonly and rarely used functionality often happens by design. And it doesn't just happen in the software industry: car manufacturers do it when they bundle their options too. The advantages of bundling for the buyer are: fewer choices (shorter lead time if you know what you want) and better budgeting (fewer trips "back to the well" for more money); the advantages for the seller are: cost containment (fewer combinations to test and support), tighter brand control (the "SE edition" instead of "features 12 and 15") and higher prices (less ability to buy smaller increments of functionality). The risk we take as a vendor is always that someone will provide a better package of benefits for a better price, but it continually surprises me closely IT consumers in any particular market will track to the pack - even paying an order of magnitude more for similar features available from an innovative competitor - the "better mousetrap" is usually only a secondary risk.

Before someone hops on here and says "the cloud will break this model", please remember that another widely-used on-demand service called "cable TV" has already figured out the bundling concept and applied it viciously. (Ever wish you could just buy ESPN and SciFi?) Once various SaaS, PaaS and IaaS industries stabilize, I'd bet bundling of "features I never use" will be a common complaint here too - and you'll keep buying nonetheless. [/evil]

Meanwhile.. in the real world (1)

js3 (319268) | more than 2 years ago | (#33967436)

Companies developing software are still raking in billions of dollars. Maybe stop giving the shit away for free...

Our business model is better... (0)

Anonymous Coward | more than 2 years ago | (#33967720)

Our business model is better, says CEO of company using said business model. Followed by, "maker of widgets says widgets are great". This needs to be tagged "slashvertisement" or something along that line.

Business real culprit, no model will change that.. (1)

johan_from_cape_town (1142715) | more than 2 years ago | (#33967820)

I happen to consult on packages software in the financial service industry - and while the technology is yucky, the sales drive/strategy model is broken the fundamental issue is ALWAYS business. Businesses should stop blaming everybody else for their problems. In the end of the day business is responsible for choosing their vendors and their implementation partners. They are free to set project constraints. They are free to do contracting in ways that better suit them. 1) Businesses should make sure procurement is done by people who know what they are doing. 2) Businesses should implement decent program and project management from the very beginning. So while I keep hearing that vendor X software is bad because the project failed - in me I know: Customer selected wrong vendor/technology, or customer selected wrong implementation partner, or customer did not manage the job from their side, or they had some political infighting (one of the sites I worked on had 18 data warehouses. and none of them could give a complete picture of organization. of course the reason for that is that they were essentially under control of different factions within the organization. ) Red Hat can say all they want about "Enterprise Software Sale Model", but I can guarantee that if the world was fundamentally different and all software was GPL open source --- the wastage would have been exactly the same. People would blow money on implementation cost. People would use the argument "but it is open source so you can modify it" so that each organization would end up maintaining its own individual branch (which would negate all the benefits of community development ). Business would keep on spending millions on getting consultants with science and engineer degrees to change fonts on screens. So while I do like open source, and I dislike enterprise license and "maintenance" fees the port of call would be to actually start managing your business efficiently. This is the reason I suspect "cloud computing" will be successful. Not because of technical reasons, but because it literally takes away a lot of the power AWAY from business and package it is as something else.
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